Ed Miliband is to consider a radical promise to outspend the Conservatives at
the next election and reverse George Osborne’s austerity measures.

Shadow cabinet ministers have been debating whether to stick to the Chancellor’s public spending plans or to promise voters an extensive programme of investment in housing and public services.

Ed Balls, the shadow chancellor, said today that it was not the party’s policy to “decide now” whether to promise more spending than the Conservatives when it fights the next election in 2015.

But neither he nor other senior Labour figures would rule out such a bold step. Party officials insisted that they would wait until the Coalition had set out its own spending plans.

Despite consistently winning more support overall in opinion polls than the Conservatives, Labour has struggled to convince voters that it has credible economic policies.

In a similar position before the 1997 election, Tony Blair, then Labour leader, promised to keep to Conservative spending limits for two years. The current party leadership is apparently ready to consider rejecting similar constraints, even though some senior Labour MPs believe they would help it win public trust.

In a radio phone-in with LBC Radio, Mr Balls claimed that he and Mr Miliband had not even talked about whether to match the Coalition’s spending plans for the financial year 2015/16, which will be set out in a spending review in June.

“Is it the policy of Ed Miliband and me, Ed Balls, that we will decide now to bet the house with a pledge to outspend the Tories? No, that is not our policy, that is not our position, and it would be totally irresponsible,” he said.

“We’ve got a spending review in a few weeks’ time from the Chancellor, we don’t know how bad the economy is going to be then. We don’t know where we will be in two years’ time.”

His comments followed reports that suggested Labour was ready to make a promise to spend more than the Conservatives amid growing fears that the Coalition’s plans are stifling recovery.

The International Monetary Fund warned this week that Britain’s growth figures were “not particularly good” but stopped short of urging Mr Osborne to ease his austerity policies.

Mr Balls received some bruising questions from callers during the phone-in.

One, named only as Sean, called him “the most annoying man in politics” and accused him of living “in denial” over the deficit.

Last night, Grant Shapps, the Conservative Party chairman, said Labour was “a Left-wing party that would take Britain back to the brink of bankruptcy”.